She counts fashion designer Stella McCartney among her best friends.
Harper's fashion features editor, Sara Buys, said,"With her Grace Kelly high glamour, Gwyneth used to embody the idea of the quintessential East Coast, privileged, all-American girl.
"Since she started living in the UK full-time, she has developed a less polished, more daring style that owes its origins to London street style.
"Gwyneth has also developed a very healthy appetite for our unbeatable High Street."
The list was compiled by a panel of British taste-makers and designers.
But despite Catherine Zeta-Jones recently being named the most glamorous woman of all time in another magazine poll, she does not feature in this top 50.
In fact Welsh people are conspicuous by their absence.
Supermodel Kate Moss is second, followed by actress Thandie Newton and model Liberty Ross.
Sienna Miller is fifth, Laura Bailey sixth, and Peaches Geldof, seventh.
Peaches, daughter of Bob Geldof and the late Paula Yates, has become a fixture on the showbiz scene.
The teenager has always held firm views on fashion, publicly criticising the dress sense of What Not To Wear duo Trinny and Susannah when she was just 14.
The rest of the top 10 is made up by model Yasmin Le Bon, writer Zadie Smith and Madonna - another star who has made her home in Britain - and become more stylish as a result, according to Buys.
"Madonna has always loved tailored, quality clothes but she is also drawn to edgy, urban culture. Living in London, she gets them both - the rich tailoring heritage of Savile Row and the experimental attitude of street style," Buys said.
Last year's winner, singer Gwen Stefani, dropped to 20th place. The full top 50 is in the May issue of Harper's Bazaar, on sale Monday.
Page 2: The Top 10 Best Dressed Women, according to Harper's Bazaar